From the following statements, identify the incorrect statement in case of underemployment equilibrium. (Choose the correct alternative) A). Resources are fully and efficiently utilised. B). An existence of excessive production capacity in the economy. C). Aggregate supply is equal to Aggregate demand below full employment level. D). Resources are not fully and efficiently utilised.

The correct answer is Resources are fully and efficiently utilised.. Underemployment equilibrium occurs when Aggregate Demand equals Aggregate Supply, but this equilibrium takes place at less than the full employment level of output. This inherently means that there is excess, unutilized production capacity and resources are NOT fully and efficiently utilized. Hence, the first statement is incorrect.

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From the following statements, identify the incorrect statement in case of underemployment equilibrium.
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